COVID-19: Should family finances extend to pocket money during the pandemic?
Families are struggling to make ends, but new research shows parents are still offering up weekly allowances to kids. Experts reveal their tips to manage kids’ pocket money.
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Children seem to be sailing through the COVID crisis with few financial worries as parents keep the pocket money tap running.
New research from Beyond Bank Australia has found 88 per cent of parents don’t think their children have become anxious about money during the pandemic, while one in 10 parents has stopped dishing out pocket money.
Two-thirds of parents pay out pocket money, with the majority of children earn between $5 and $10 a week, while a lucky 8 per cent get $20 a week, according to the research.
However, 18 per cent of children have been expected to do more chores around the house during COVID-19 to get their cash.
Beyond Bank Australia national operations manager Sophie Scott-Young says children are chipping in more with chores and odd jobs around as families spend more time at home.
“There is more work to be done to keep things clean and tidy, which means parents need to call on the kids,” she says.
Pocket money remains a great tool for teaching children about getting paid for work and appreciating that money is not endless.
“Pocket money enables kids to still have that feeling of having an income and thinking about what they can do with it,” Scott-Young says.
“With so much taken away from them during the pandemic, the ability to think about what is special to them and what they really want means that pocket money gives kids something to look forward to and enjoy.”
While many families are struggling financially amid COVID-19 employment cuts, others are finding spare cash from cancelled holidays and other lifestyle expenses.
“With limited dining out options available and kids’ activities often on hold, there is less discussion around the affordability of things,” Scott-Young says.
Lee May, 39, says her children Sahra, 10, and Baxter, 6, receive $10 a week in pocket money if they do their chores.
“It gives them an opportunity to learn the importance of working hard, making good financial decisions and developing self-control around spending and saving,” she says.
“They do chores for money as it’s preparing them for the real world and adulthood.”
May says COVID-19 has given her time to think about how children could contribute to a fair family environment “and one way they can do this is by taking over some of the day-to-day tasks that normally fall to Mum and Dad”.
Smart Financial Solutions director Fatima Dib says the dialogue in many homes has changed during COVID-19, creating some financial anxiety amid conversations about job security, spending and utility bills.
“A solution here is to take the opportunity to simply explain to the children in an age-appropriate way what is going on around them and that as a family team we must all contribute for a short a time,” Dib says.
“This may mean that they will need to continue with chores but will only receive half their pocket money.” Dib says pocket money should be “an exchange for hard work and responsibility that the child carries within the home”.
“It teaches children to budget and make financial decisions for themselves with money they have earned,” she says.
PAYMENT ADVICE
• Only pay what your budget allows
• Set realistic amounts based on a child’s age and chores
• Give guidelines about how it can be used – this prevents tension later
• Never borrow or steal it back from them
• Be consistent – if they don’t do the chores they don’t get the money
• Consider transferring the money to a bank account to teach them electronic banking and prevent cash from burning holes in their pockets
• Help children set financial goals such as saving for a new toy or experience.
Originally published as COVID-19: Should family finances extend to pocket money during the pandemic?